After seven years of delays over legal technicalities, a trial court Monday finally heard arguments about the constitutionality of the Louisiana Legislature using fees paid for a specific purpose to help balance the state’s annual budget.
Nineteenth Judicial District Court Judge Donald Johnson, of Baton Rouge, said from the bench that he would mull over the arguments and decide the issue later.
Fund sweeps were a common practice to help find the money necessary to pay for state government services rather than cut them. The precedent is still available though Commissioner of Administration Jay Dardenne, the chief budget architect, repeatedly says the dedicated funds have no more money available to be moved for other purposes.
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Legislators, at the urging of the Jindal administration, took monies accumulated in various dedicated funds. In 2009 and 2010 – the years involved when this lawsuit was filed – the Legislature took funds dedicated to programs, such as the DNA testing and lawyers for indigent criminal defendants, cleaning up oil spills, improvements for state parks, rapid response for economic development, labor training, customer service and technology upgrades at the Office of Motor Vehicles.
One of those agencies, the Louisiana Public Service Commission, challenged diverting to the state general fund the fees collected from utilities, trucking concerns and telecommunications firms to pay for inspections and enforcement of regulations. But a series of technical legal issues, such as whether the commissioners had the right to file a lawsuit, sent the matter to appellate courts several times.
With the legal technicalities sorted out, Johnson asked to hear the constitutional arguments.
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“I never thought this day would come,” Interim PSC Secretary Brandon Frey said as he walked into the courtroom to deliver the regulators’ position.
The PSC historically has been entirely self sufficient, taking its money from the fees paid into three dedicated funds. The funds sweep by the Legislature amounted to about half the agency’s annual budget for each of the years.
Frey argued that the laws creating the funds explicitly require any leftover money not be used other state services. The companies paying the fees pass those costs onto their customers.
“You’ve got pretty clear language in these statutes,” Frey told Johnson.
Converting the fees to support education, hospitals and other state services also denied the companies any way to challenge the amounts paid. Plus, fund sweeping gives those not subject to the fees benefits paid for by others, Frey said.
The Legislature has the constitutional authority to decide how to spend state money, which the fees became when paid, countered Assistant Attorney General Patricia Wilton, who represented the Legislature.
Legislators can change provisions of various laws and did so to redirect dedicated surplus monies in Act 226 of 2009 and Act 633 in 2010, she added.
Those laws were passed after committee hearings and several votes. “It wasn’t done in secret and it wasn’t done without proper legislative procedures,” Wilton said.
Calling the case a little dog eared, Glen R. Petersen argued for a quick decision because the Legislature is scheduled to go into session in March and could sweep funds again to help balance a budget that officials estimate could be more than $1 billion short of the revenues needed to pay for existing services.
Petersen represents ratepayers and asked that Johnson, if he finds the fund sweeps unconstitutional, to require the state repay the $8.5 million taken in 2009 and 2010 from the PSC.
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“I read in the paper we need to do something with our budget that the legislators created over the last few years,” Johnson said. “We’re in a mess.”